Builder of the Atlas

(See Cover)

Up from the sands of Florida's Cape Canaveral last week shot the Atlas intercontinental ballistic missile with fiery blast and awesome roar. It climbed majestically into a layer of low-hanging clouds, disappeared to the southeast, and a few minutes later plummeted into the ocean 600 miles away--as planned.

Hardly was the Atlas' bright orange tail lost from view when officials rushed to telephones in a concrete blockhouse 750 ft. from the launching pad. Out went the news to the White House, where President Eisenhower replied "good" to word of Atlas' second successful launching in less than a month. Another call flashed the news across the continent to the San Diego headquarters of Convair, builder of the Atlas. And in a small office on Manhattan's Park Avenue, yet another call came to Frank Pace Jr., 45, president of General Dynamics Corp., the giant industrial complex that embraces not only Convair but half a dozen other defense and weapons-producing industries.

Frank Pace, a lean man with worry-free eyes, had a lot of other things on his mind that morning, as befits a man who manages a missile-age empire--and who reached that top post in four short years. An Arkansas-born wonder boy. Pace was U.S. Budget Director (under Harry Truman) at 36 and Secretary of the Army at 37--two jobs that prepared him well for the presidency of General 1 Dynamics, a Arm that does 85% of its business with the Government.

With another General Dynamics-Government success-chalked up, Pace expressed the admiration of the top commander for the men in the industrial front lines. Said he: "A very fine job!"

Rare Marriage. The Atlas--or "The Bird" to missile workers--is the most spectacular of the new weapons produced by General Dynamics, which has rocketed out of obscurity in a single decade to become the second biggest U.S. defense contractor (after Boeing) and by far the most wide-ranging.

It has grown from a $14 million midget in 1946 to a $1.5 billion giant--a hundredfold sales increase. From two plants employing 3,500 people, it has spread across the U.S. and all the Western Hemisphere into more than 100 plants with upwards of 100,000 workers.

Many of them go about their appointed tasks in spick-and-span, air-conditioned surroundings as clean as a kitchen, as cloistered as a scientific laboratory. A rare marriage of scientific talent and hard-headed business know-how, General Dynamics employs one scientist for every five workers, has a roster of consultants that includes such greats as Edward Teller, father of the hydrogen bomb, and Dr. Theodore von Karman, Caltech's brilliant mathematician and aerodynamicist.

Dynamics' stock is one of Wall Street's most glamorous, and hardly a week goes by without a spate of reports about another project or merger planned by the company. Last week three mergers were rumored; all were denied by the company. The glamour is more than skin-deep: a share of Dynamics' stock bought for $25 in 1952 is now worth $192 (after splits); the company's profits rose 40% to an estimated $44.8 million last year. In the deadly competition of weapons, brains and power between the U.S. and the Soviet Union, General Dynamics is in the forefront of the battle. Besides the Atlas, its other products include:

P: The Nautilus, first atomic submarine, produced by General Dynamics' Electric Boat Co., which recently turned out the third atomic sub, Skate, six months ahead of schedule. Electric Boat is finishing three more atomic submarines, expects to get contracts to build a sub able to launch the Polaris missile while submerged.

P: The 1,300-m.p.h. B58 Hustler, described by President Eisenhower as the plane that will replace the B-52, now going into mass production at Convair. The B58 is expected to be the backbone of the U.S. air striking force for years to come.

P: The 800-m.p.h., delta-winged F-102, now the Air Force's only supersonic, all-weather interceptor, being turned out at a fast clip by Convair, which has already delivered 700 of the 1,000 ordered. Convair is working on an improved version, the F-106, which will fly fast enough (1,300 m.p.h.) to catch the fastest bomber, already has Air Force orders for 300.

P: The cathode tubes (trade name: Char-actron) that are the heart of the SAGE air-defense warning system and the electronic computers that guide U.S. missiles to their targets, both produced by General Dynamics' Stromberg-Carlson Division.

P: Sabre jet fighters and submarine hunter-killer planes for most of the free world, rolling off the assembly lines of Canadair Ltd., Dynamics' wholly owned Canadian subsidiary.

P: Terrier, a rocket-powered interceptor missile that can streak off like a hawk from the decks of a heavy cruiser to destroy enemy bombers far out at sea, and the smaller Tartar missile for destroyers.

Golf & Poetry. As remarkable as the scope and variety of General Dynamics' activities is the fact that the firm is virtually the creation of one man, a princely dreamer named John Jay Hopkins, who died of cancer last May at 63. The handsome, debonair son of a California Presbyterian minister, Hopkins was trained in the law (Harvard '21), made a fortune in the stock market while still a young man, developed into an executive with one of the widest-ranging minds in U.S. industry. A tireless worker, he could put in an 18-hour day and then sit up in Manhattan nightclubs until dawn discussing Swinburne's poetry or intergalactic travel. An ardent golfer, he even formed the International Golf Association to promote worldwide friendship through golf.

Hopkins first ventured into the arms business in 1937 as a director of small, conservatively managed Electric Boat Co., of Groton, Conn., which was formed in 1899 by a merger of two boat companies with Electro Dynamic Co., a motor manufacturer that later became a General Dynamics division. One of Electric Boat's founders, John Holland, built the U.S. Navy's first submarine--U.S.S. Holland--in 1896, and the company had led a feast-or-famine existence since, depending on the number of Navy orders. When Hopkins arrived, the company was famished. He made such a good impression as director that when World War II broke out the Navy asked him to take over as vice president in charge of financial and legal matters. He whipped the company into battle shape (Electric Boat turned out 72 subs during the war, more than any other yard), moved into the president's chair in 1947.

Imaginative Ambitions. At war's end Hopkins foresaw that the cold war was here to stay, and that the U.S. would need a new type of company to help wage it--one that turned out not just tanks, or guns, or planes, but entire weapons systems. He set out to create a General Motors of defense, visualizing it as a national service as well as a business. Using Electric Boat as his nucleus (the company had plenty of cash but few orders after 1945), he worked out a careful formula for expansion. He wanted solid, well-managed firms that could be picked up for a small amount of cash or an exchange of stock, then made into even better companies.

He made his first move in 1947. Canada's huge government-owned aircraft industry, Canadair, seemed too heavy a peacetime investment for the Canadian government, and it was shopping for a buyer. Hopkins snapped up the two plants for only $2,500,000 cash, and every year since then Canadair has returned its original purchase price in profits. Though his company was still small, Hopkins searched around for a name that would better reflect his imaginative ambitions--and settled on General Dynamics.

Hopkins next cast his eye on a company that was nearly twice as big as both Canadair and Electric Boat together: California's Consolidated Vultee Aircraft (Convair), sixth largest U.S. airframe manufacturer. Convair-had been having its ups and downs, and Owner Floyd Odium ler in developing the hydrogen bomb.

P: Gordon Dean, 52, onetime head of the Atomic Energy Commission, now director of General Dynamics' atomic program.

P: J. Geoffrey Notman, 56. Canadair's grizzled, square-jawed president, known as "willing horse" because of his 12-to-18 hour workday. Notman began his career as a junior engineer in Quebec, directed the production of airplanes, explosives, ships and guns for the Canadian government during the war; he was taken on as executive vice president in 1950, elected Canadair's president in 1952.

P: Carleton Shugg. 58, stocky, pipe-puffing general manager of Electric Boat. A naval officer specializing in submarine construction before he joined Sprague Electric in 1929, Shugg managed shipyards during World War II, became deputy general manager of the Atomic Energy Commission, was hired in 1951 as the man ideally suited to run Electric Boat.

Monopoly on Brains. Under the leadership of this seasoned team. General Dynamics is heavily betting on research--or what Dr. Krafft Ehricke, Convair's astronautics expert, calls "wandering in the tomorrows"--to put it on top of the new atomic-space age. This year the company will invest $15 million in research into everything from desalting of sea water to astronautics. Though it can hope for no profit for years, it has sunk $15 million into its General Atomic Division for basic research rather than have it manufacture reactors that may soon be obsolete, thus hopes to develop better models and get a bigger market in the 1960s.

To attract top men for research. General Dynamics has set out to build what Vice President Johnson calls "a monopoly on brains,'' now employs about 22,000 engineering and scientific personnel, pays them top salaries, e.g., $25,000 to $27,000. As a further inducement, General Dynamics lets its scientists delve into the most abstruse and uncharted fields with freedom, aware that in an age of rapidly changing technology the most basic research may prove valuable--perhaps even indispensable--for some new project. But Pace realizes that profits cannot be put off forever. Says he: "When our scientists begin to see a light, the planning people must show them how that idea can be put to use in the corporation. You must always tie research and planning together."

General Dynamics' widespread diversification eases the task of finding uses for its scientists' new ideas. When Convair evolved the idea for the Charactron tube, which can read 1,200,000 characters a minute. Stromberg-Carlson got the job of producing and distributing it. and Electric Boat set to work adapting it into a "synthetic porthole" to give a commander all the complex information picked up by a submarine's scouting equipment.

In the low-profit, high-volume defense business. General Dynamics' earnings--about 3% of sales--are not overimpres-sive. To get the company into more profitable fields. Pace would like to increase General Dynamics' nonmilitary business to 50%. Convair is turning out jet-powered 880 airliners (though sales have so far been disappointing). Stromberg-Carlson is bending its efforts toward new and better electronic computers that could open up vast new commercial markets for General Dynamics. And last fall the corporation worked out a merger through an exchange of stock with Liquid Carbonic, an international producer of industrial and medical gases.

The Wizard. But General Dynamics' competence in weaponry stacks the cards heavily against rapid growth of the corporation's civilian lines. Vital defense projects are bound to grow rather than shrink in the next few years. Convair and RCA have already submitted to the Defense Department plans for an anti-missile missile, the Wizard II, which could search out an incoming enemy ICBM and explode it high in the atmosphere. The Wizard could conceivably be put into production by 1965 (at a cost of up to $5 billion) if the Defense Department gives an immediate go-ahead for a crash program.

TV in the Sky. As man ventures forth into space, General Dynamics is sure to have a planet-sized chunk of any U.S. undertaking. The company's task, as Frank Pace sees it, is not to reach too far ahead, but to plan carefully what it feels can be accomplished in the next 25 years. Its scientists have already placed on Washington desks a four-phase plan that would put manned satellites into space within five years. An improved Atlas would, by mid-1959, put a reconnaissance satellite into orbit 350 miles up to transmit televised images to earth. This would be followed by a series of satellites that, by early 1960, would keep a 24-hour watch on every part of the earth's surface. By late 1960--provided the Government adopts the plan soon--Atlas would push a manned hypersonic glider (five times the speed of sound) into orbit, finally lift freight ships into space to provide living quarters for a new generation of space residents. Not content with this plan, General Dynamics' scientists also have their eyes, minds and scientific talents fixed firmly on developing spaceships (called "Probes") to explore outer space. Surveying such projects, Frank Pace is convinced that defense industries have seen the last of the old feast-or-famine cycle. Says he: "If you have a good staff, you can count on business far into the future. There is competition, but basically the decisions are made on the basis of competence rather than price." Pace is convinced that General Dynamics has both the competence and the staff to help push back the frontiers of modern technology. Says he: "We may be behind the Russians for the moment, but we'll catch up--and go away beyond."

* Each Atlas launching tests different components in the missile. Last week's flight was not for distance, but to make the first test of the small rocket engines on the side of the missile that 1) maintain speed while the missile cuts off its two take-off engines (after about 130 sec. in flight), leaving only the main sustaining engine; and 2) control direction and velocity of the missile.

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